By alphacardprocess January 21, 2022
A Point of Sale (POS) Transaction is a purchase made at any store using payment cards such as credit card, debit card, gift card and loyalty cards. When you make a purchase with your credit/debit card in a retail store, the retailer will either swipe or insert your card into a POS terminal. Signal is sent to the credit/debit card network and processed for payment. The POS Terminal will then ask you to insert your chip or PIN card. It is important that you watch the transaction to make sure it’s correct, as you would do in a self-serve purchase such as a vending machine.
How does a POS transaction work?
When you make a purchase with your card, the terminal will send an electronic signal to the issuer to verify if there are enough funds in your bank account or on your credit card. If there is enough money, the transaction goes through and a confirmation message is sent back to the retailer’s POS system. The retailer can then complete the sale and print a receipt for you.
Types of POS Systems:
There are different types of POS systems depending on how the point-of-sale devices communicate with one another and with the back office or host computer. They all have in common the fundamental ability to record information about your payment, such as its time and amount, and to authorize payment for specified goods.
Here are the most common differences between them:
Choice of a payment network – You can select your preferred payment network to conduct transactions through. This is particularly useful if you find that certain networks work better where you live or at certain times of the day.
Integration – The POS system can be integrated with your company’s other systems or not. If it is not, then you may need to enter information manually on the cash register for later updating in the back-office system. If so, time will be lost because it means that several manual entries are required instead of just one.
Integrated systems can be very useful, as they allow you to do business with fewer errors. For example, the cash register may not ring up the correct price of an item or it might forget to record that someone bought a gift. This information is recorded automatically in the back-office system, which also allows you to generate reports more quickly. In some cases, you can even run reports from your smartphone on your daily sales and transactions.
Integration may also be important if you have a loyalty program or electronic benefits transfers (EBT) card system in place. Both of these features require a connection to the back office that non-integrated systems lack.
Transaction capture – The POS system can either capture the transaction immediately or record it only after the cashier has closed out the sale. If you choose real-time transaction capture, data is sent simultaneously to your payment processor and your back office. If you do not need this level of integration, delayed transaction capture is somewhat simpler because many retailers find that there are fewer errors in this process.
Transaction capture can also help you protect your customers’ privacy and provide an additional level of security to your transactions. Since the transaction is captured by the time it is closed out, there should be less chance that any information will be lost due to a mistake by the cashier.